Microfinance Company needs to raise $800,000 to improve the position of cash. It has decided to issue
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Question:
a. Compute the market value of bonds.
b. What will the net price if the flotation cost is 5 percent of the market price?
c. How many bonds will the company have to issue to receive $800,000?
d. What is the company s after-tax cost of debt if the average tax rate is 20 percent and the marginal tax rate is 30 percent?
Related Book For
Foundations Of Finance
ISBN: 9780135160619
10th Edition
Authors: Arthur J. Keown, John H. Martin, J. William Petty
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